The concept of trading in a car to "upgrade" involves combining the amount of equity you will lose in your present car when trading it in, with the increased amount you will owe on the new car. If that total larger debt is attractive to you; when compared to the advantages of driving the newer vehicle, the deal then becomes worthwhile.

Some people don't mind losing money on their present car, and going deeper into debt, in order to drive a newer vehicle. Other people would consider it unthinkable to do such a thing (particularly in the current uncertain economy). It both depends on the mechanical and cosmetic desirability of your present vehicle; on your economic condition, and on the perceived benefits of the newer vehcle.

It also might be worth considering that you would potentially lose less money if you sold your present car privately; and then bought the "upgrade" car for cash. Dealers typically will not give you as much for your car on a trade in, as you could get by selling it on the open market. This is because the dealer has to resell your old car, and make a profit. But sometimes they offer you a high trade in allowance on your old car; the problem is that when they do that, you will find that the asking price of the "upgrade" car has been inflated to make up for the extra allowance they gave you on your old car.

Selling a car privately through an online ad can be a major hassle; especially in the current economy. And that may be enough of a pain to offset the financial advantage.